Trade and Industrial Development in East Asia

Trade and Industrial Development in East Asia

Catching Up or Falling Behind

Peter C.Y. Chow

Trade as an engine of growth has played a catalyst role in East Asian development; through vigorous study of performances in past decades, East Asian trade and industrialization experiences may offer some lessons for other developing countries. This book covers trade and industrial structures for ten countries and regions including Japan, China, Hong Kong, Korea, Singapore, Taiwan, Indonesia, Malaysia, the Philippines and Thailand.

Chapter 10: Conclusion

Peter C.Y. Chow

Subjects: asian studies, asian economics, economics and finance, asian economics, international economics

Extract

Export-led growth strategies have significantly contributed to East Asia’s dynamism since the 1960s. Japan despite being a latecomer to industrialization, became the “mother goose” of the flocks and was followed by the “four Little Tigers:” Hong Kong, Korea, Singapore, and Taiwan. Having been following Japan’s export-led development trajectory for decades, these four countries became the “newly industrialized countries” (NICs). Spectacular economic growth and trade expansion in Japan and the four NICs enabled them to weather the two energy crises in the 1970s, and they continued their trade and economic growth until the early 1990s. The four South East Asian countries (Association of Southeast Asian Nations – ASEAN-4) – namely Indonesia, Malaysia, the Philippines, and Thailand – shifted from import-substitution to export-promotion policies, or at least adopted a dual track of export-promotion and import-substitution, after the first energy crisis in 1973. The ASEAN-4 was conceptually considered as the second tier of the “flying geese,” having joined the flock by adopting an outward-looking trade policy after the early 1970s. After three decades of central command and “inward-looking” socialist economic policies, China initiated its economic reform and openness in 1978–1979. It went through a series of economic reforms and shifted its trade regime by replicating the export-promotion policy undertaken by the NICs. Given its huge population size and relatively abundant endowment of natural resources compared to the four NICs, China was able to penetrate the world market with significant impact on the world economy. After three decades of economic reform and successful export growth, China...

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